Laroe v. Sugar Loaf Dairy Co.

• Decision Date: 03 February 1905
• Citation: 73 N.E. 61,180 N.Y. 367
• Parties: LAROE et al. v. SUGAR LOAF DAIRY CO.
• Court: New York Court of Appeals Court of Appeals

180 N.Y. 367

73 N.E. 61

LAROE et al.

v.SUGAR LOAF DAIRY CO.

Court of Appeals of New York.

Feb. 3, 1905.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by James B. Laroe and others against the Sugar Loaf Dairy Company. From the judgment of the Appellate Division (84 N. Y. Supp. 609,87 App. Div. 585) affirming a judgment for defendant, plaintiffs appeal. Reversed.

A. H. F. Seeger, for appellants.

John J. Beattie, for respondent.

CULLEN, C. J.

The plaintiffs sued for a balance alleged to be due on the sale and delivery of milk to the defendant during a period of six months, commencing October 1, 1901, under a contract by which they were to be paid therefor a specified price. The defendant answered, denying the contract declared on in the complaint, and pleading payment in full. The dispute was not as to the quantity of milk delivered, but solely as to the price which was to be paid. One of the plaintiffs testified that shortly before October 1st he made an agreement with one Knapp, the secretary of the company, and its general agent and manager in Orange county, where the defendant's dairy was situated, whereby the plaintiffs were to deliver and the defendant was to take the milk from plaintiffs' farm during the period mentioned, and pay therefor what was known as the ‘New York Market Price.’ Under this the plaintiffs delivered milk until the early part of November, when one of them met Sanford, the president of the defendant, who asserted that Knapp hnd no authority to make the contract with the plaintiffs, and that, if the plaintiffs continued to deliver milk, it must be at the same price as that they had been paid during the previous year. A day or two thereafter the defendant served a written notice on the plaintiffs to the same effect. To this notice the plaintiffs responded, also in writing, stating, in substance, that they had made a valid contract with the defendant, through Knapp, under which they intended to continue their deliveries of milk, and with the terms of which they expected the defendant to comply; that, if the defendant paid less than the contract price, they would credit it for the amount paid, and hold it for the balance, and in proper time sue for such balance. After this correspondence the plaintiffs delivered milk to the defendant during the whole of the specified period. Shortly after the end of each month the defendant sent a check to the plaintiffs for the amount of the month's deliveries, calculated at the price of the previous year. Accompanying the check was a statement giving the amount of milk delivered, and the price therefor, and at the foot of the statement these words: ‘To check in full.’ Plaintiffs collected the checks, but gave no receipts therefor. At the close of the plaintiffs' case the trial court directed a verdict for the defendant on the ground that the receipt of the checks constituted a valid accord and satisfaction.

We think this disposition of the case was erroneous. The plaintiffs' evidence, if credited, established a clearly valid contract with the defendant, under the terms of which it was indebted to the plaintiffs in the amount for which the suit was brought. The payment of an amount less than that for which the debtor is liable does not constitute a valid accord and satisfaction unless there is a bona fide dispute as to the debtor's liability, or as to the amount due from him (Bunge v. Koop, 48 N. Y. 225, 8 Am. Rep. 546;Komp v. Raymond, 175 N. Y. 102, 67 N. E. 113), or unless the damages are unliquidated. While the defendant's president repudiated the contract made by Knapp, its secretary, still, under the evidence given by the plaintiffs, Knapp's ostensible authority in favor of third persons dealing with him seems clear. Therefore there was a question of fact for the jury to determine as to the bona fides of the defendant in the dispute as to its obligations under Knapp's contract. But there is a more serious objection to the disposition of the case made by the trial court. It is the general rule, as stated in Fuller v. Kemp, 138 N. Y. 231, 33 N. E. 1034,20 L. R. A. 785, and Nassoiy v. Tomlinson, 148 N. Y. 326, 330,42 N. E. 715, 716,51 Am. St. Rep. 695, that where there is a disputed claim ‘the plaintiff cannot be permitted to assert that he did not understand that a sum of money, offered ‘in full,’ was not, when accepted, a payment in full. H...